CoolBrands to bail out unit, sell another
Nov 21, 2006 9:03 AM, from staff and wire reports
CoolBrands International Inc announced that 2118769 Ontario Inc, a company controlled by CoolBrands co-founder Michael Serruya, has entered into an agreement to acquire the debt of bankrupt subsidiary Americana Foods LP.
Dallas TX-based Americana, which is CoolBrands’ 50.1%-owned joint venture facility, is in United States bankruptcy proceedings and is in default of its obligations to senior lenders. CoolBrands has total debt of about US $25 million, of which some US $21.7 million is the Americana debt acquired by 2118769.
In other news, CoolBrands has entered into a letter of intent to sell its CoolBrands Dairy Inc subsidiary to Healthy Food Holdings LLC for US $45 million in cash, a US $5 million subordinated note, and a warrant to purchase up to 2 million shares of stock. CoolBrands Dairy produces and markets Breyers yogurt products. Healthy Food Holdings, controlled by Catterton Partners, also owns The Yofarm Co, which manufactures and markets YoCrunch yogurt products.
CoolBrands also has closed the sale by its subsidiary, Eskimo Pie Frozen Distribution Inc, of its “direct store door” frozen distribution assets in Florida, California, Oregon, and Washington to Southwest Traders Inc for about US $5 million. Net proceeds from the sale will be used to repay part of CoolBrands’ borrowings.
